Duncan Baird

Today, it was announced that Kindred Healthcare will acquire the State of Arkansas’s In-Home Health Unit, which is operated by the Department of Health. The state will receive $39 million dollars in proceeds from the transaction.

As part of the terms of the deal, Kindred agreed to retain the current employees and patients. Language was provided to the Department of Health during the Fiscal Session that would allow them to use a portion of the proceeds from the sale as an incentive for employees to remain with the unit until the transition is complete.

The Health Department has put a tremendous amount of work into both sustaining the unit in recent years, as well preparing for and executing on this transaction over the last year.

“This is a success for the state of Arkansas,” said Asa Hutchinson, Governor of Arkansas. “We are not in the business of competing with the private sector. The Arkansas Department of Health provided an important service while it was necessary, and now private sector companies can fill this need. I am pleased that Kindred Healthcare will continue the excellent work of the ADH In-Home Services program.”

Kindred Healthcare and the Arkansas Department of Health Announce Definitive Agreement for Kindred to Acquire In-Home Health Care Operations

http://www.businesswire.com/news/home/20160620006328/en/

On Monday, Governor Hutchinson signed the Revenue Stabilization Act and the final few appropriation bills into law. The House and Senate met that morning to adjourn “Sine Die” and bring the 2016 Fiscal Session to an official close.

In March, Governor Hutchinson proposed a $5.333B general revenue budget for Fiscal Year 2017, which begins in July. This budget included new funding to meet our K-12 Educational Adequacy requirements, Medicaid match, and increased Foster Care needs. Additionally, new dollars were allocated for economic development efforts, statewide workforce initiative grants, and maintaining out of state prison beds.

The total proposed increase was 2.7% over the prior year, which is lower than the 5-year, 10-year and 20-year averages. Most state agency budgets remained flat, with no increases outside of these few mandatory and targeted needs. Additionally, the number of authorized personnel positions were reduced in multiple state agency budgets due to efficiencies from consolidations, the hiring freeze, and agency efficiency initiatives.

The session began with uncertainty surrounding the appropriation for the state Medicaid program, which included spending authority for the Arkansas Works Medicaid expansion. After much debate and discussion, the Medicaid budget was passed and the focus shifted back to the broader budget issues.

In Arkansas, we have a single subject rule that requires a separate appropriation for each state agency. This results in around 300 appropriations to provide spending authority to the close to 200 state agencies (including boards and commissions). With the passage of the Medicaid appropriation, the session kicked into high gear. Reappropriations and small agency appropriations began moving through the process at the start of the session, and the legislature turned their attention to increasingly larger bills as the days went by.

Last week the Revenue Stabilization schedule was placed on the member’s desks. The Revenue Stabilization law is a mechanism unique to Arkansas that determines the allocation of general revenue to state agencies, prioritized by category, and is the keystone of the budget process. The final schedule closely aligned with the Governor’s balance budget proposal, with only a small amount shifted, primarily to increase the rainy day fund.

With the signing of Revenue Stabilization Act and the final appropriations into law, the work of the 2016 Fiscal Session is done. After the long days of preparation, and long hours of debate, the session concluded after just over 3 weeks.